Why be debt-free? My Story

Ever since I was a child, I was taught to never spend unless I had the money to buy. It's a very simple concept that has served me well throughout my adult life - to the point in which my only real debt is the mortgage on my house at the age of 35. This, from what I have researched, is a rare situation. Market research shows that Americans now have the highest credit card debt in U.S. history. (MarketWatch) Americans are over $1.021 trillion dollars indebted, about 67% of the total owed being from mortgages, followed by auto and student loans. I decided last year that I didn't want to be in this statistic anymore and that I would do my very best to be completely debt-free by the age of forty.

In truth, I have been very blessed in my life to have avoided a student loan through scholarships for academic excellence, a New York State Pell Grant, and generous parents who allowed me to live at home until the age of twenty-five. Living at home with my parents allowed me to save money for a mortgage down-payment when I moved out of state to start a new career.

Graduation from University at Buffalo

In terms of auto-loans, again, my parents' kindness and generosity saved me from going into debt before my twenties. As a birthday gift, my father had purchased me an old junker of a car that got me into my senior year of college. Then, as a graduation gift from college, my family bought me a brand-new car. And yes, I did greatly appreciate their gifts to me and am still trying to pay them back for all they had given and taught me. Now, I'm helping them as they enter retirement, but that's a different story...

The car that they had bought me lasted for over ten years - if you're curious, it was an Oldsmobile Intrigue. If that manufacturer still existed today, I would have purchased another. (I loved that car.) When I did need a new car, I did indeed get a new auto-loan but paid it off in two years instead of five by making extra payments. Yes, I did break Dave Ramsey's rule about buying old junkers. As a professional woman, it is very important to me to have a safe and reliable car that will get me to and from work, as well as on my many road trips. 

Buying a junker saves you money short term, but will cost you in time at the shop to maintain and repair it. Therefore, go ahead and buy a new car with the intention of keeping it for 10 years or more. Time is money!

Therefore, the only real debt I have is my mortgage and I want to wipe it away with hard work and perseverance.

Why pay off your mortgage, you ask?

Perhaps it's my age as I apparently fall into the xennial generation that exists between Gen X and the Millennials, but I don't want to owe anyone anything. I want to exist on my own terms and do what I want - when I want to do it without fear. Since my mortgage takes away the biggest slice of my paycheck pie, I'd like to remove it from the equation. 

Those of us who lived throughout the Great Recession of 2006 - 2008 know how difficult it can be when the "bubble bursts". I had purchased my first house, a townhouse with an HOA, after moving to a new state and lost my job in quick succession. I hope that you never know the absolute horror that you experience when you no longer have a job as a single person with a mortgage.

The unfortunate issue was that I felt stuck because I took advantage of that first-time home buyer credit that was available in that time to encourage home ownership by the government. Therefore, I was required to stay in that home for at least three years or I had to pay the credit back. I also had expensive Home Owners Association fees. Those of you who have bought a first home know that it's expensive to furnish and get it setup. Not knowing that I was about to lose my job, I had spent the credit on home improvements. My only saving grace was that at that time, the Bank of America had a special first-time home buyers mortgage insurance that covered you if you had a job loss for up to six months.

Side note:
If you know of any insurance companies that sell this type of coverage, please let me know! I don't think it exists anymore...

Takeaways from that horrible experience:

1. Build an emergency fund for at least six months of mortgage payments or
2. Pay your mortgage ahead for six months so that you don't have to worry about it.
3. Don't buy a house with a Home Owners Association fee - Please, don't do it!
4. Keep a very close eye on the markets before buying a home.
5. Pay off your mortgage so you don't have to worry about it!
6. Find friends that will support you. Be that friend in return.

I will say that it wasn't all bad. Unfortunately, ALL of my friends had lost their jobs within a week or two of myself - so we job hunted together and spent our time supporting each other through the tough time. I will never forget them! We also all found jobs six months later within a week of each other - so I am sure it was the economic conditions preventing us from working.

To get right to the point, I never want that to happen again!

Anyone who has advice on how to quickly pay off your mortgage is welcome to comment below.